Brokers

Best Brokerage Accounts and Trading Platforms for Beginners in May 2024

Prostock-Studio / Getty Images/iStockphoto

Prostock-Studio / Getty Images/iStockphoto

Trading stocks may seem daunting, but there’s a wealth of information out there for investors of every experience level. The trick can be finding the platforms and tools that are geared for the beginning investor. Here are the 10 best stock trading websites for those who are new to investing.

Read More: 5 Genius Things All Wealthy People Do With Their Money

1. E-Trade

  • Account minimum: $0

  • Fees: $0 stock, ETF, and mutual fund trades, $0.65 for options, $1.50 for futures

  • Account types: Brokerage, IRAs, Robo-advisor

Why they were included: E-Trade is one of the original online trading platforms and is now owned by Morgan Stanley. With years of experience helping beginning investors, E-Trade has a wealth of information on all things investment, ranging from diversification to risk tolerance to options trading. The platform includes screener tools to help you choose the best investments for your goals, research, news and even retirement planning tools.

E-Trade offers $0 commission on U.S. listed stocks, bonds and options. There is a 65 cent fee for options contracts, although if you trade 30 or more options per quarter, that drops to 50 cents. The fee for futures contracts is $1.50

E-trade lets you invest through a standard taxable brokerage account–but also offers access to IRAs–including traditional, Roth and Rollover IRAs.

E-Trade Pros and Cons

Pros

  • Commission-free trading of stocks and ETFs

  • No minimum deposit to open an account

  • Huge knowledge base for learning about investing

Cons

  • No SEP or SIMPLE IRAs available for business owners

  • Robo-advisor has higher fees than some competitors

  • Some advanced trading features may overwhelm beginners

2. Robinhood

  • Account minimum: $0

  • Fees: $0 stock, ETF, and crypto trades, $0.03 for options

  • Account types: Brokerage, IRAs, Crypto

Why they were included: Investors who use Robinhood can trade in stocks, options, ETFs and crypto. They also offer margin. Since they cater to the beginning investor, the website includes information on everything from what an investment is to how to analyze a stock to how to invest for retirement, all in plain language. And you don’t have to have a Robinhood account to get access to this basic information so you can learn first, and invest later.

Robinhood also offers a cash card, a debit card that lets you round up your purchases and invest the difference. And they recently announced a cash-back credit card that offers 3% cash back on all purchases (but you need to join a waitlist to get one).

Robinhood is known for lost-cost trades, charging $0 for stock and ETF trading, and only $0.03 per options contract–which is one of the lowest charges in the industry. But while crypto trading doesn’t charge any trading commissions–there is a spread fee that can end up being expensive, depending on the cryptocurrency being traded and market conditions.

Robinhood Pros and Cons

Pros

  • Commission-free trading of stocks, ETFs and crypto

  • Very inexpensive options trading

  • Well-designed mobile app–ideal for beginners

  • IRA match of 3% on top of annual contributions

Cons

  • Robinhood has been in trouble with the SEC over deceptive practices

  • No access to mutual funds or bonds

  • Cannot call customer support directly (must request a call)

3. Webull

  • Account minimum: $0

  • Fees: $0 stock, ETF, and crypto trades, up to $0.55 for options

  • Account types: Brokerage, IRAs, Crypto, Robo-advisor

Why they were included: Webull touts its investing technology, and its easy-to-navigate website which includes lots of courses on investing topics. You can take a beginning trading course, then graduate to more complex subjects like put and call options, covered calls, crypto, stock splits, technical analysis and more. They even over a robo-advisor service that can build an investment portfolio for you and automatically invest your money.

Investors who use Webull can invest in stocks, including fractional shares, ETFs, options and cryptocurrency. They support extended hours trading, including pre-market from 4:00 a.m. to 9:30 a.m. EST and aftermarket from 4:00 p.m. to 8:00 p.m. EST.

Webull boasts zero-commission stock, ETF, and crypto trades–though crypto may charge a spread fee. It also offers options trading for minimal fees–and index options trading for only $0.55 per contract

Webull Pros and Cons

Pros

  • Commission-free trading of stocks, ETFs, crypto and select options

  • Low-cost robo-advisor available for only 0.20% annually

  • Beginner investing and trading courses available

Cons

4. SoFi

  • Account minimum: $0

  • Fees: $0 stock, ETF, and crypto trades, up to $0.55 for options

  • Account types: Brokerage, IRAs, Crypto, Robo-advisor

Why they were included: SoFi offers an active investing platform with no commissions or account minimums. They offer stocks, including fractional shares, ETFs, and options–and you can trade on margin. If you have an active investing account you can participate in IPOs before they begin active trading on an exchange. SoFi also has a community of investors you can interact with to share information and knowledge.

SoFi doesn’t charge commissions on stock and ETF trades–and there are no contract fees for options trading. SoFi also offers a robo-advisor that doesn’t charge fees–though this service does create portfolios with proprietary SoFi funds. And SoFi used to offer crypto trading–but retired the service in 2023.

SoFi Pros and Cons

Pros

  • Commission-free trading of stocks, ETFs–plus no-fee options contracts

  • Robo-advisor service is free (though SoFi does place users in SoFi funds)

  • Free access to financial advisors and career coaches for all SoFi members

Cons

  • No access to mutual funds, bonds or fixed-income products

  • Crypto trading no longer available

5. Vanguard

  • Account minimum: $0

  • Fees: $0 stock, ETF, and some mutual fund trades, $1 for options

  • Account types: Brokerage, IRAs, 401(k), Custodial, 529, Robo-advisor, Wealth Management

Why they were included: The Vanguard online brokerage account caters to the beginning investor. There’s a lot of information in plain language that will teach you important concepts like asset allocation, portfolio management and more. In your Vanguard brokerage account, you can buy and sell mutual funds, individual equities, exchange-traded funds, bonds and CDs.

Vanguard charges no fee on some mutual fund transactions, as well as ETFs, stocks and CDs. Options contracts incur a fee of $1 per contract. There is an account service fee, but it is waived if you opt for e-delivery of statements and other documents, or if you hold at least $5 million in qualifying assets.

No- and low-fee accounts are great, but not if you’re sacrificing return. Vanguard boasts that 75% of their ETFs beat the returns of their Lipper peer-group averages.

Vanguard Pros and Cons

Pros

Cons

6. Fidelity

  • Account minimum: $0

  • Fees: $0 stock, ETF, and some mutual fund trades, $ 0.65 for options

  • Account types: Brokerage, IRAs, 401(k), Custodial, 529, Crypto, Robo-advisor, Wealth Management

Why they were included: Fidelity offers commission-free trades on U.S. stocks, ETFs and options. They don’t charge account fees. You can get information to inform your trading decisions with their Active Trader Pro platform and use their research tools to understand trends and how they can impact your goals. Fidelity offers mobile trading with a custom dashboard so you can trade wherever you are.

Fidelity offers fractional share trading for over 7,000 U.S. stocks and ETFs in a program they call Stocks by the Slice in case you’re looking to add Berkshire Hathaway to your online portfolio and don’t have six figures to invest.

Fidelity also recently added crypto trading for Bitcoin and Ethereum–allowing Fidelity customers to trade crypto for a flat 1.00% spread fee.

Fidelity Pros and Cons

Pros

  • Low- and no-fee mutual funds available

  • No trading commissions for stocks, ETFs, and some mutual funds

  • Large library of user education and helpful training materials

Cons

7. Ally Invest

  • Account minimum: $0

  • Fees: $0 stock and ETF trades, $ 0.50 for options

  • Account types: Brokerage, IRAs, Robo-advisor, Wealth Management

Why they were included: Ally Invest gives investors the option of self-directed trading, robo portfolios that automatically adjust your portfolio in accordance with your goals, and wealth management by a human advisor.

Self-directed trading features $0 commissions on stocks, ETFs and options, although options incur a fee of 50 cents per contract. Ally also offers over 17,000 commission-free mutual funds. If you want to invest in low-priced securities — stocks under $2.00 per share — there’s a minimum $100 investment plus a penny a share fee. There’s no account minimum, and you can trade any time on the mobile app.

Ally Invest Pros and Cons

Pros

  • No trading commissions for stocks and ETFs

  • Low contract fees for options trades

  • Large inventory of commission-free mutual funds

Cons

8. Charles Schwab

  • Account minimum: $0

  • Fees: $0 stock and ETF trades, $ 0.65 for options, $2.25 for futures

  • Account types: Brokerage, IRAs, 401(k), Custodial, 529, Robo-advisor, Wealth Management

Why they were included: Charles Schwab is one of the largest brokers in the world–with a wide range of financial products and account types. If you’re a beginner that wants to get into more active trading, Schwab has multiple platforms to choose from. And with the recent TD Ameritrade acquisitions, traders now have access to world-class trading platform thinkorswim platform–with built-in research, training, and tools for active trading.

In addition to trading tools and research, Schwab has a large educational library to help new investors get up-to-speed on everything from retirement planning to taxes to options trading.

Schwab offers $0 stock and ETF trades, as well as access to thousands of fee-free mutual funds. Schwab also offers options trading for only $0.65 per contract, and futures trading for $2.25 per contract.

Charles Schwab Pros and Cons

Pros

  • No trading commissions for stocks, ETFs, and some mutual funds

  • Access to many fixed-income investments

  • Futures trading available

Cons

9. Merrill Edge

  • Account minimum: $0

  • Fees: $0 stock and ETF trades, $ 0.65 for options

  • Account types: Brokerage, IRAs, 401(k), Custodial, 529, Robo-advisor, Wealth Management

Why they were included: Merrill Edge is the self-directed investing platform from Merrill, now owned by Bank of America. The platform has no minimum investment and no commission charge for stocks, ETFs and options trades–though there is a contract fee for options trading. Research and investing insights are available to you if you need them, either online or on the Merrill app.

Since Merrill is owned by Bank of America, your Merrill balances count toward some of the perks you can get if you also bank at Bank of America, like credit card rewards and loan interest rate discounts.

If you’re not ready to manage your own investments yet, Merrill also offers Merrill Guided Investing, an online platform that provides you with asset allocation, monitoring and rebalancing by investment professionals. There’s a $1,000 minimum investment for the guided investing platform.

Merrill Edge Pros and Cons

Pros

  • No trading commissions for stocks, ETFs, and options trades

  • Wide range of account and investment choices

  • Access to financial advisors available

Cons

  • No fractional share trading

  • No forex, futures, or crypto trading

  • Low amount of commission-free mutual funds available

10. Interactive Brokers

  • Account minimum: $0

  • Fees: $0 stock and ETF trades, up to $0.65 for options, up to $0.85 for futures

  • Account types: Brokerage, IRAs

Why they were included: Interactive Brokers has several trading platforms that have various levels of complexity. Beginning investors may be overwhelmed, but if you have some background or want to jump right into complex trades, it’s worth a look.

Going beyond stocks, bonds and ETFs, Interactive Brokers‘ platforms let you trade options — including futures options — spot currencies, crypto, warrants, combinations, structured products, physical metals, hedge funds and more. Not all positions are available on all platforms, though, so you’ll want to know what you’ll be investing in before you choose.

Interactive Brokers has very low fees and commissions all around–from $0 stock and ETF trading, to futures trading for only $0.85 per contract. And crypto trading is very low at just 0.18% per trade with no spread fees.

Interactive Brokers Pros and Cons

Pros

  • Very low fees for most trades–and no added spread fees

  • Access to wide range of investments, including stocks, ETF, fixed income, mutual funds, crypto and forex

  • Very low margin rates

Cons

FAQ

  • What brokerage should a beginner use?

    • There are a few well-designed brokerage accounts for beginners, depending on the type of investing needs required. Robinhood is famous for its minimal user interface and guided investing approach. Fidelity is a large trusted broker with access to more than just stocks and ETFs. And Charles Schwab offers a huge library of user education to help investors get started. All of these brokers offer $0 commission stock and ETF trading, making it easy to get started.

  • What is the best brokerage account to start with?

    • The best brokerage account depends on what you are investing for. If you want simple no-fee trades, then there are a handful of great brokers, such as Fidelity, Webull, Charles Schwab, and Robinhood. If you want more trading tools, Charles Schwab and Interactive Brokers offer robust trading platforms. Since most brokerage accounts offer zero-commission trades on stocks and ETFs, it’s a matter of preference which one you choose to start with.

  • How much money do I need to start a brokerage account?

    • Most brokerage accounts don’t have a minimum deposit requirement to get started. But you’ll usually need at least $1 to place your first trade–with some requiring $5 or more. Many brokerages offer fractional-share investing–letting you buy a portion of a stock for just a few dollars. But if a broker does not offer fractional shares, you’ll need to deposit enough to buy at least one share of the investment you want to purchase.

  • Do you pay taxes on brokerage accounts?

  • Is it better to invest in a 401(k) or brokerage account?

    • Investing in a traditional 401(k) account can help lower your taxable income and grow your retirement balance. This can save you thousands of dollars per year in taxes if you’re in a high tax bracket. But you can’t usually access 401(k) funds until you’re at least 59 1/2 years old–while you can access all your money in a brokerage account at any time. Brokerage accounts are taxable, but offer more flexibility than a 401(k) account.

Information is accurate as of May 6, 2024.

Karen Doyle contributed to the reporting for this article.

Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.

This article originally appeared on GOBankingRates.com: Best Brokerage Accounts and Trading Platforms for Beginners in May 2024

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